By Don Gooding
Executive Director, Maine Center for Entrepreneurial Development
Entrepreneurship accelerators, often known as seed accelerators, seem to be all the rage these days. Based on this enthusiasm and demand, the Maine Center for Entrepreneurial Development started Top Gun Maine in 2009, modeled in part after TechStars and Kansas Pipeline.
The fourth annual program, to be offered January–May 2013, reflects lessons learned about adapting concepts born in major American technology hubs to very different entrepreneurial demographics. Three key lessons are:
Maximizing an accelerator’s impact requires a robust entrepreneurship curriculum
Modifying the accelerator model enables its successful application to a diverse set of entrepreneurs
Creating value in the short term is critical, but developing a longer suite of programs also is necessary for successful launch of most companies
Finding the Right Fit
Wikipedia defines seed accelerators as “having an open application process, taking in classes of startups consisting of small teams, supporting them with funding, mentoring, training and events for a definite period (usually three months), in exchange for equity… accelerators are privately-funded and focused on mobile/Internet startups.”
This standard type of accelerator model is not feasible in Maine, the most sparsely populated state east of the Mississippi. The “big city” of Portland, Maine, has a population of just 66,000 anchoring a “metro population” of 500,000, with about 40 percent of the state’s population living on just 8 percent of the land mass. We are a small business state with the fifth-highest concentration of very small businesses (1–10 employees). It’s challenging to get a cluster in any industry, let alone mobile/Internet startups.
However, our proximity to the robust technology and academic sectors of Massachusetts (along with an unusually strong college and university network for a state our size) means that Maine has world-class talent spread across a number of technology and industry sectors (and geographies). We also are fortunate that two best-of-breed programs have sprouted here. Maine Technology Institute (MTI) has extremely flexible funding programs that have attracted or kept promising startups, while the University of Maine’s Innovation Engineering™ curriculum (developed with Eureka Ranch) is teaching students and businesses alike a management system to bring efficient processes to innovation.
Maine’s combination of challenges and strengths attracted the Blackstone Charitable Foundation to invest in a $3 million, three-year effort to strengthen entrepreneurship and innovation in the state. Top Gun Maine is one of the programs benefiting from Blackstone Accelerates Growth, and the funding enabled it to expand from an annual class for a dozen entrepreneurs in Portland, to a three-part program reaching more than 50 entrepreneurs annually across the state.
Five evolving program elements have developed in response to our entrepreneurs’ needs and lessons learned from each year running the program. First, our classes are targeted to Maine entrepreneurs building scalable innovation-based businesses, but are otherwise extremely diverse in industry, stage of development (startup through $1 million annual revenue) and age of entrepreneurs (AARP demographic is welcome) which is necessary to build large enough classes in a sparsely populated state. Second, our diversity is sometimes a challenge but often a strength due to peer mentoring across different stages of development, exposure to dramatically different business models, and occasional unexpected cross-fertilization, as when Cerahelix created DNA-shaped ceramic filter pores using DNA sourced from Kennebec River Bioscience’s fish blood. Third, we don’t offer funding in return for equity since most Top Gun Maine graduates will never be a fit for angel or venture capital investing, but we do give equal curriculum time to bootstrapping techniques, writing grants, and equity.
Our fourth program element is our mentor pool, which includes some professional services providers, retired executives with deep industry experience, and successful entrepreneurs from more traditional industries. Note the unconventional composition of this mentor group, since there’s not a deep pool of successfully exited technology entrepreneurs and early-stage investors in the area. Finally, in spring 2012, we experimented with videoconferencing two classes in Portland and Orono (home of the primary University of Maine campus), using university Polycom facilities. This worked better than expected, allowing great speakers to reach all entrepreneurs with talks originating from both ends of the link across the dozen sessions.
Much of the structured curriculum in the first three years included some “Business 101” to address entrepreneurs’ needs, which meant that entrepreneur-mentor discussions often weren’t fully leveraging mentors’ expertise until late in the program. This past fall we successfully launched a new season with Top Gun Prep, an eight-week online course (using Adobe Connect) that reached 50-plus entrepreneurs scattered across the state. We taught a mixture of Steve Blank’s Customer Development (using his new book The Startup Owner’s Manual), Innovation Engineering™ plus basic financials and financing. The class was open to anyone paying the $300 fee, and included a half-dozen university students who received Blackstone Accelerates Growth scholarships. Much was learned from this pilot, including:
A blend of Silicon Valley (Steve Blank) and heartland (Doug Hall/Innovation Engineering™) is necessary to connect with entrepreneurs from diverse industries, and even then some business models aren’t quite adequately covered (such as bioscience, and consumer niceties such as entertainment).
A two-hour online class sustained interest through combining a fire hose of content with frequent interactive breaks, in particular the use of Adobe Connect’s polling and chat features.
A live online class puts isolated rural entrepreneurs side by side with their more urban counterparts to the great benefit of the former.
Once again, diversity of businesses was a plus since some basic concepts were easier for all to understand using basic businesses participating in the class as case studies.
Recording the class for later viewing was essential to appeal to busy entrepreneurs trying to juggle daily operations, family, and class.
Online class participation greatly enhances the ability to vet applicants to the more selective Top Gun Maine program where mentor participation is key, with eight weeks to get to know the entrepreneurs versus an application and an interview.
Finally, we have started to roll out Top Gun Next. Most entrepreneurs aren’t quite ready to launch after Top Gun Maine, despite their accelerated progress. This program borrows from the defined period model of accelerators, and focuses on specific projects that help bring graduates to the next level—for example, building a fully functioning advisory board, or finishing preparations for equity fundraising.
The resulting program certainly differs in many respects from the best-known accelerators, but isn’t that what niche entrepreneurs do—adapt to their market? With one successful bootstrapped exit, three successful angel financings, more than $1 million in grants and other financing, and a 90 percent company survival rate, Top Gun Maine has proven that we are delivering the education Maine’s most promising entrepreneurs need.